Those earning monies from outside Australia may no longer be able to buy up properties in Australia, even if they bring their own cash to the table. Australia’s four big banks – Westpac, ANZ, Commonwealth and NAB, have all began to tighten their foreign lending policies by putting measures such as face-to-face meetings and reduced loan amounts in place.
This recent move could be in response to the recent property market boom, to prevent an unhealthy and unmonitored bubble from growing out of control. Westpac bank for example has ceased lending to non-residents, temporary visa holders and buyers whose income come from outside the country. In recent years, foreign investment in Aussie properties have soared, understandably stirring up some concerns from Australia’s government and citizens. Property prices in Sydney and Melbourne rose 9 and 10 per cent respectively, with prices across Australia rising 7 per cent last year.
China, the United States, Singapore and Malaysia were countries where the most property buyers come from, in descending order. Property buyers from China alone invested A$24 million in 2015, almost five times the amount in 2013 (A$5million). Chinese buyers often use monies sourced outside of Australia and even cash to fund their investments. Aussies banks are also making the move to reduce their exposure to property funds. Currently, 60 per cent of the banks’ property loans are to local residential buyers.
